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Steve Hansen
Are the advantages of leasing versus owning that great?
If you own a food processing and packaging plant, you are probably interested in the answers to those two questions. We are going to give you the lowdown on leasing versus buying that equipment.
Advantages of leasing
Leasing equipment has several advantages over purchasing equipment; check out some of the tips for every small business owner.
Some of those advantages include:
- You have more flexibility with your capital cash to do other things the company needs.
- Tax advantages for leasing that owning does not receive.
- Leasing is more affordable; the monthly payments are lower than purchasing.
- Fixed payments with leasing are unlike bank loans, which use variable interest rates that can change over the loan term.
- The equipment value is in its use, not ownership.
- With leasing, the sales tax is paid over, not upfront, at the time of sale.
- Your equipment will always be up to date instead of needing updating, and with inflation on the rise, it is crucial that you do not break the bank updating your equipment.
- Lower down payments than financing to own.
- Leasing equipment allows you to stay current with new packaging trends, such as the move away from plastic to biodegradable materials.
Leasing your equipment has more advantages than owning it. One significant advantage is that your equipment will always be up to date, and you will not have to wait to sell your old equipment.
The latest trend in food processing and packaging
Leasing has become the latest trend in many industries. But especially in food processing, packaging, and many other types of manufacturing businesses. According to Food Processing Magazine, equipment is leased by private investors to companies. Private investors’ equipment is manufactured in Europe and leased in North America. The same article explains that robotics is also becoming a trend, even in food processing and packaging. One place where robotics is highly used is palletizing. It is affordable to even mid-sized operations. It combines case packing and palletizing with robotic palletizers.
Types of food processing and packing equipment for lease
You can lease equipment for many processes in the food processing and packaging industry.
Some of these processes include the following:
- Homogenization
- Mixing
- Size reduction or enlargement
- Baking
- Blanching
- Dehydration
- Evaporation
- Frying
- Pasteurization
- Peeling
- Roasting
- Sterilization
- Preservation
- Food packing materials
- Material Handling
- Storage
- Product Distribution
The types of equipment are:
- Soak/flotation tanks.
- Spray washing
- Sterilizers
- Ovens
- Dryers
- Fryers
- Pasteurizers
- Smokers
- Chillers
- Freezer
- Sorters
- Emulsifiers
- Agitated tanks
- Paddle mixers
- Anchor mixers
- Non-thermal extruders
- Single-screw extruders
- Twin-screw extruders
- Refrigerated extruders
- Conveyors
- Seamers for sealing cans
- Form-fill-seal systems for sealing flexible film
Those are just some of the equipment types that can be leased. The list is too long to print here. As you can see from that long list, your business would be financially broke if you were to purchase all that equipment. However, leasing the equipment saves your working capital, provides tax breaks, and you can upgrade your equipment with ease as the need arises.
Industries that use leased equipment
Many industries use leased equipment. When it comes to food and beverage, here are a few of those companies:
- Alcoholic beverages
- Bakery and confectionery products
- Dairy – milk, yogurt, sour cream, and cheese
- Fish and seafood
- Fruit
- General food products include cereals, flour, sugar, pasta, and more.
- Meat and poultry
- Soda, water, tea, juices that are not alcoholic
- Vegetables
Many food processing and packaging companies lease their equipment. However, they are not the only industry that rents equipment. Leasing equipment is truly an excellent choice. You never have to worry about depreciation on the equipment. You can take advantage of the lease being an expense and not an asset on your tax filings. Above that, the most significant benefit is that you can upgrade your equipment as newer, more innovative equipment becomes available. You will have the capital to spend on other business needs and expansion. All those reasons are why you would want to lease the equipment for your food processing and packaging plant.
